Modern Mining May 2024

ODERN M INING May 2024 | Vol 20 No 5 For people who are serious about mining

IN THIS ISSUE  MetSop on journey to revolutionise flotation reagents development with AI  Commodities Outlook: Uranium’s oxide rush  Junior mining funding focus  Booyco Electronics flags collective collaboration for successful PDS  Southern Palladium lines up Bengwenyama for construction in 2026

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CONTENTS

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ARTICLES COVER 6 MetSop on journey to revolutionise flotation reagents development with AI COMMODITIES OUTLOOK

8 Uranium’s oxide rush JUNIOR MINING

10 Junior mining funding focus 14 Eyeing up early-stage projects 16 Southern Palladium lines up Bengwenyama for construction in 2026 HEALTH & SAFETY 24 Booyco Electronics flags collective collaboration for successful PDS adoption 27 MRTA – training for exceptional performance 29 ‘Safe production’ ethos earns Venetia 10 million fatality-free shifts 31 Conveyor innovations with safety top of mind 33 Innovative mind-set underpins Kal Tire’s success 36 Safety first, innovation always as BME maintains zero case rate

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REGULARS MINING NEWS 3 Altona Rare Earths Zambia copper license acquisition Awalé hits multiple shallow high-grade intercepts at Odienné Project 4 Kenmare Resources MD to step down Commercial production achieved at the Langer Heinrich Mine 5 Copper 360 inks MoU with FWGR for due diligence on copper tailings dams First gold from Gold Fields’Salares Norte Mine COLUMN: ROSS HARVEY 38 Mining must integrate with Integrated Development Plans SUPPLY CHAIN NEWS 40 Astec Industries announces new dealer partnership in DR Congo Multotec leverages lithium experience for equipment supply to new projects Manitou: Innovative material handling solutions for mining

ON THE COVER MetSop continues to push boundaries by embracing the transformative potential of artificial intelligence and dry lab concepts. See story on page 6.

May 2024  MODERN MINING  1

Golden glow – happiness for some commodities T he colour yellow has traditionally been a symbol of hope, joy and happiness; and with gold and uranium – also known as yellow-cake, in strong demand, miners of these commodities are certainly radiating happiness.

are getting more attractive due to rising prices and anticipated supply deficits over the coming years. According to Tom Price, Head of Commodities Strategy at Liberum, “Since its dormant days of 2015-20, the trade’s flagship oxide price has reported a stunning 250% lift to just over $100/ lb in January.” Liberum is bullish on uranium demand, which is underpinned by a “worldwide re-acceptance of nuclear power as a carbon-free base load option. But we’re even more bullish on supply: reactivations are underway; the project pipeline is expanding,” says Price (see pg 8). In this edition We feature Junior Mining in the May edition with Minerals Council South Africa’s Junior and Emerging Miners Desk lead, Grant Mitchell, shar ing insights into some of the latest developments underway in the junior mining space, including a shot in the arm from the Junior Mining Exploration Fund, which is allocating R400 million to encour age companies to enter the mineral exploration space. The fund is set to open in May 2024 to pro vide much needed assistance to black emerging miners looking to unlock opportunities in the junior mining space (pg 10). Also of interest is the conversation with Peter Major, director at Modern Corporate Solutions, where he provides a viewpoint from investors and corporate financiers for evaluating Greenfields projects (pg 14). Emerging miner, Southern Palladium, keeps us abreast of progress on its flagship Bengwenyama project, which is lined up for construction in 2026. The project is now firmly placed on the radar of numerous potential financiers who attended the 1-2-1 event and the Mining Indaba in February, says MD Johan Odendaal, who believes that the next year-and-a-half could see slow improvement in demand for PGMs, driven by the automotive industry and a shift to hybrid vehicles (pg 16). Also of note is the health and safety feature which includes: Booyco Electronics, De Beers, Kal Tire, Tru-Trac and Murray & Roberts Cementation Training Academy. 

Gold hit some high notes early in April, surg ing above $2 300/oz and sending markets into a frenzy. Uranium too is tracking prices not seen in a while. Although gold’s contribution to the South African economy has declined significantly over the years, it still contributes about 15% to overall South African mining output. Interesting news from the gold sector is that miner, Harmony Gold, will extend the life of Mponeng mine – the world’s deepest gold mine, stretching more than four kilometres below ground, by 13 years. The miner announced an investment of R7.9bn to extend the life of the Mponeng mine from seven to 20 years, with works scheduled to commence in 2025. In some really exciting news, Zimbabwean geologist, PhD recipient Dr Steve Chingwaru, is said to have made a groundbreaking discovery of the world’s largest gold resource, valued at billions. Dr Chingwaru’s revolutionary research in geometallurgy has potentially uncovered the world’s largest invisible gold resource, valued at R450 billion. Chingwaru is the first scholar to cal culate that the six billion tons of tailings around Johannesburg’s mines contain up to 460 tons of gold. Robust demand for gold and South Africa’s declining gold output are all the more reason why this ‘find’ is so valuable. Meanwhile, uranium, which is an important commodity in the energy sector as it provides fuel for nuclear power generation and sup plies 10 percent of global energy needs, is also basking in the glow of high prices. Rising uranium prices have spurred the revival of uranium mining operations previously scaled back after the 2011 Fukushima disaster. Analysts and industry players anticipate more uranium mine restarts in 2024. Plus, new builds

COMMENT

Nelendhre Moodley.

Editor: Nelendhre Moodley e-mail: mining@crown.co.za Advertising Manager: Rynette Joubert e-mail: rynettej@crown.co.za Design & Layout: Darryl James Publisher: Karen Grant Deputy Publisher: Wilhelm du Plessis

Circulation: Brenda Grossmann and Shaun Smith Published monthly by: Crown Publications (Pty) Ltd P O Box 140, Bedfordview, 2008

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The views expressed in this publication are not necessarily those of the editor or the publisher.

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Average circulation October-December 2023: 14 533

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MINING news

Altona Rare Earths Zambia copper license acquisition

LSE-listed Altona, a resource exploration and development company focused on critical raw materials in Africa, has entered into an agreement with Sustineri Group and with the benefi cial owners of Phelps Dodge Mining (Zambia) to acquire the issued share capital of Phelps Dodge Mining (Zambia), the reg istered holder of large-scale Exploration Licence 21403-HQ-LEL, located in the Mufumbe District of Northwestern Province of Zambia. The consideration for the transfer of the exclusivity over the Tenement from Sustineri to Altona is £40 000, to be satisfied by the immediate issue of 800 000 new ordinary Altona shares at a price of 5p. The tenement has a surface area of around 616 km² and is valid for copper, cobalt, nickel, lead, zinc, gold and dia monds. The tenement is located 4 km west of the Kamweji copper occurrence, and 60 km southwest of the Mufumbwe copper mine. Immediate exploration work will include repro cessing the magnetometer survey data and an ionic leach soil sampling survey at a reduced sample spacing, ahead of defin ing drilling targets by year end. Cedric Simonet, CEO of Altona, commented: “Securing an asset with enough potential to have historically attracted the

Altona Rare Earths Zambia inks copper license acquisition. attention of a major player in the copper mining industry is a sig nificant achievement for Altona. We are delighted to make our entry into Zambia with this acquisition; a country where world class copper and cobalt discoveries regularly make the news. 

Awalé hits multiple shallow high-grade intercepts the Odienné Project TSX.V-listed Awalé Resources has reported significant assay results at the Odienné Project. The BBM Zone is a grassroots discovery. The latest holes followed up on this promising new discovery, and the company expects to restart drilling in April. The multiple, shallow, broad, high-grade intercepts demonstrate the BBM zone’s excellent continuity and scale potential. high-grade gold mineralisation encoun tered in multiple drill holes underscores the prospectivity of our exploration area and highlights the substantial value it holds for our company and stakeholders.”

With an established robust geologic framework, the company can progress with a targeted drilling programme to scope

Andrew Chubb, CEO of Awale Resources, commented: “We are delighted with these assays from the follow-up programme at the BBM target. The mineralisation is robust, and we have now confirmed plunging high grade mineralisation over 500 m of strike, which remains open in all directions. The consistently

Andrew Chubb, CEO of Awale Resources.

size potential, geological and grade continuity of the minerali sation as well as test for new parallel shoots along the 8 km of open strike. 

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MINING News

Kenmare Resources MD to step down Kenmare Resources, a producer of tita nium minerals and zircon, which oper ates the Moma Titanium Minerals Mine in northern Mozambique, has announced that Michael Carvill will step down as MD later this year. As part of the compa ny’s succession planning, Kenmare’s Nomination Committee has com menced a process to find Carvill’s successor. Carvill founded Kenmare in 1987 and, under his leadership, Kenmare has evolved into one of the world’s largest producers of titanium minerals. The company serves custom ers operating in more than 15 countries and is responsible for 7% of global sup ply of titanium feedstocks. Since 2019, Kenmare has returned over $230 mil lion to shareholders through dividends and share buy-backs.  Kenmare Resources MD Michael Carvill.

Langer Heinrich Mine in Namibia.

Commercial production achieved at the Langer Heinrich Mine

product inventory ahead of shipments to customers, the company said. As part of the transition to production, Paladin’s Chief Operating Officer, Paul Hemburrow will assume responsibility for all LHM activities. 

Uranium miner, Paladin Energy, has announced that uranium concentrate pro duction and drumming were achieved at the Langer Heinrich Mine (LHM) on 30 March 2024. Focus will now shift to pro duction ramp-up and building a finished

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Copper 360 inks MoU with FWGR for due diligence on copper tailings dams

Emerging copper miner, Copper 360 recently signed a memorandum of understanding (MOU) with Far West Gold Recoveries (FWGR), a subsidiary of DRDGOLD (DRD), to conduct a due diligence (DD) on the company’s copper tailings dams. The MOU is for a period of 12 months to conduct a DD on the O’Okiep, Carolusberg, Lower and Upper Nama Copper copper tailings dams. During the due diligence period, FWGR will, through an independent expert, determine (a) the total tonnage of tailings material by Lider survey applying a density of 1.4 tonnes per cubic metre and as may be required, (b) a purchase consideration to acquire 50% of the copper tailings dams if the result of the DD is to the satisfaction of FWGR. Jan Nelson, CEO of Copper 360 com mented: “Copper 360 estimates that there are about 50 to 60 million tonnes of dump material with grades varying between 0.18% and 1.5% copper and with the poten tial to contain 450 000 tonnes of copper metal in situ. During the DD, FWGR will independently assess the economic viabil Fluor announces first gold from Gold Fields’ Salares Norte Mining Project in Chile NYSE-listed Fluor Corporation’s Mining & Metals business has announced that first gold has been achieved at Gold Fields’ Salares Norte mining project in Chile. Salares Norte is a high-grade gold-silver, open-pit deposit in the Atacama region of northern Chile at an altitude of between 12 750-15 400 feet (3 900-4 700 metres) above sea level. “Salares Norte is a project at the forefront of innovation, technology and environmental care,” said Harish Jammula, President of Fluor’s Mining & Metals busi ness line. Fluor is responsible for the engineering, procurement and construc tion management of the project. Construction and pre-commissioning is scheduled for completion in April. Once fully operational, some 350 000 ounces of gold is expected to be mined annually through the life of the mine. 

ity of the copper dumps and, if the results are to their satisfaction, the parties will enter into a joint venture agreement. FWGR may acquire 50% interest in the tailings dams at a price to be independently agreed and will become the operator of the dumps. “Copper 360 is currently focused on commissioning two processing plants at the Rietberg Mine and drilling and evalu ating five new mines. Our expertise and focus is not tailings treatment although we

recognise the potential of the copper dumps. It is therefore logical that we have approached the world leaders in dump retreatment to see if a potential partnership could be negotiated to poten tially bring these assets to account if the DD is viable.” 

Jan Nelson, CEO of Copper 360.

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COVER STORY

MetSop embarking on a journey to revolutionise

In the dynamic realm of mining technologies, MetSop, a leading flotation reagents company, continues to push the boundaries by embracing the transformative potential of artificial intelligence (AI) and dry lab concepts. With an unwavering commitment to innovation, MetSop is poised to revolutionise the development of flotation reagents, driving efficiency, sustainability, and profitabil ity to unprecedented heights.

T raditionally, the development of flotation reagents has relied on labour-intensive pro cesses and empirical experimentation. This approach however is rife with inefficiencies and limitations. Recognising the need for a paradigm shift, MetSop has embarked on a visionary path, harnessing the combined power of AI and dry lab concepts to redefine the future of flotation reagents. At the core of MetSop’s strategy lies a deep inte gration of AI and dry lab methodologies into every facet of reagent development. Through advanced data analytics and machine learning algorithms, MetSop can analyse vast datasets derived from min eral compositions, ore characteristics, and flotation process variables. This data-driven approach offers researchers and developers invaluable insights, enabling them to design and optimise reagents with unprecedented precision and efficiency. Moreover, MetSop’s use of dry lab concepts further enhances its capabilities in reagent development.

Right: Implementation of artificial intelligence.

Below: Metsop employee packaging a filtered concentrate product before drying in the oven.

By simulating and modelling complex chemical interactions in a controlled environment, MetSop can conduct virtual experiments to explore myriad reagent formulations and assess their performance. This enables MetSop to accelerate the development cycle, minimise costs, and mitigate risks associated with traditional wet lab experimentation. The formulation and optimisation of flotation reagents stand as the primary area where AI and dry lab concepts converge within MetSop’s inno vative approach. Through AI-driven algorithms and virtual screening techniques, MetSop can rapidly design and evaluate novel reagent compositions with enhanced performance characteristics tailored specifically for flotation processes. By leveraging the predictive power of AI, MetSop can customise reagents to suit various ore types and processing conditions, thereby maximising recovery rates while minimising environmental impact. In addition to driving operational excellence, MetSop’s embrace of AI and dry lab concepts under scores a strong commitment to sustainability within the mining industry. By optimising reagent formula tions and reducing waste, MetSop is helping miners to minimise their environmental footprint and com ply with stringent regulatory requirements. From

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flotation reagents development with AI

Metsop employee filtering a concentrate product from a flotation test.

reducing water and energy consumption to mini mising the use of hazardous chemicals, AI-powered solutions are driving towards a more sustainable and responsible approach to flotation reagents development. As MetSop continues to lead the charge in innovation, the company remains dedicated to collaboration and partnership with industry stake holders, academia, and technology providers. By fostering an ecosystem of innovation and knowl edge-sharing, MetSop aims to accelerate the adoption of AI and dry lab concepts, unlocking new opportunities for growth and prosperity in the flota tion reagents sector. MetSop’s pioneering efforts in integrating AI and dry lab concepts into flotation reagents develop ment mark a significant milestone in the company’s journey towards excellence and sustainability. By harnessing the power of AI and dry lab method ologies, MetSop is not only redefining the future of reagent development but also shaping the future of industrial innovation. As we stand on the cusp of a new era in flotation technology, MetSop stands at the forefront, driving towards a smarter, more effi cient, and more sustainable future for the flotation reagents industry and beyond. 

Metsop employees checking the efficiency of the rotary splitter.

Metsop employee rotary splitting a sample.

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COMMODITIES OUTLOOK

Uranium’s oxide rush By Tom Price, Head of Commodities Strategy at Liberum The tiny global commodity market of uranium is hav ing a moment. Since its dormant days of 2015-20, the trade’s flagship oxide price has reported a stunning 250% lift to just over US$100/lb in January.

It is estimated that 175 mlbs of uranium oxide will be required to fuel the 437 reactors operating globally, this year.

W hat prompted the rally? It’s the outcome of a series of macro-scale events – beginning with the universal price driver of post-lockdown’s demand recovery, boosted then by 2022’s war-spike of global energy markets, buoyed more recently by the market realisation that nuclear power can help us decarbonise global power generation. In recent weeks though, the price retreated to $90/lb. Has the rally ended, with all bull elements now ‘priced in’? Or is it a pause, before the signal pushes even higher? Die-hard bulls of the market – dominated by mining majors of Canada-Kazakhstan Africa-Australia – insist that there’s more upside from here, on a winning combination of a structural shift in global demand versus weak mine supply growth. Yes, we too see an enduring bullish twist in uranium’s demand growth outlook. But how uranium’s supply-side responds to it depends far more on the behaviour of its two biggest miners – Cameco and Kazatomprom – than many investors seem to realise. For at least in the short-term, their effective joint production rate will directly impact oxide’s price. So, do they maximise returns? Or do they secure their share of total mine supply? Before we explain this price-driving supply-side dynamic, we need some perspective on key elements of the mutually depen dent global markets of uranium oxide and nuclear power. Global reactor demand snapshot According to World Nuclear Association, there are 437 nuclear reactors operating worldwide, for a total of 393 GWe of net-capac ity, delivering about 10% of the world’s total electricity supply, with another 61 reactors being constructed (+65 GWe). Our estimate of the total uranium oxide required to fuel these reactors this year is 175 mlbs (+2.5%YoY). Of this, we expect 136 mlbs will come from mines. The 40 mlb supply shortfall will be met by the on-going flow from various stockpiles located worldwide. All this oxide is required to undergo preparation – conversion-enrichment fuel assembly – before it can be used in a reactor (generally, the

oxide itself represents <30% total cost of fuel assembly). WNA’s reactor capac

Koeberg nuclear power-plant in South Africa.

ity growth forecasts suggests oxide demand growth over the next decade is robust. A net-65 GWe lift, or 15%, in the global reactor fleet. Over 40% of this growth will occur in China (+25 GWe; total net-lift to 77.5 GWe), followed by India (+10% of total; +6.1 GWe to 12.8 GWe). The big miners For 2024, we forecast that the world’s top-10 miners will deliver 75% of total mine supply (top three, 45%). Compared to the broad est range of global commodity markets – Metal, Energy, Bulks – uranium’s supply-side industry is regarded as moderately con solidated. That is, the top producers possess some price power, via their collective production rate. While it remains untested, the pricing power of the top uranium miners is akin to crude oil’s OPEC. Of the miners, we review here 2024’s three big ones. The world’s top miner is 24 mbl/yr Kazatomprom, Kazakhstan’s gov ernment-backed entity, runs ISL operations in the country’s south; maintains local JVs with Cameco, Orano, Uranium One. 18 mlb/yr Cameco has its core mines in Canada’s Saskatchewan; partly verti cally integrated (conversion; power gen/distribution); reactivation of its key McArthur River mine is a response to uranium’s price lift. 17 mlb/yr Orano is France’s vertically integrated nuclear power-gen utility (mining, conversion, enrichment); mines located in Niger. The stockpiles Over the past decade, about 80% of total global uranium supply has been delivered from mines, the rest from various inventories located worldwide. Uranium’s flow from stockpiles is a feature of this market. No other commodity trade’s total supply is so depen dent on its inventories. Also, with known and accessible inventories

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Husab uranium mine in Namibia.

totalling at least 850 mlbs (>4x annual demand), few markets have such a large overhang (includes reactor tailings, mixed radioactive fuels, weapons-grade material). Re-activations & projects Not since this market’s 2007 oxide price spike has uranium’s industry featured the current surge in industry reports on asset reactivations, expansions, project deployments – a general response, over the last 6-12 months, to this latest price rally. Of these, we regard the key market-driving events include Cameco’s reactivation of its 18 mlb/yr McArthur River & possible expansion of its neighbouring 10 mlb/yr Cigar Lake (Canada); reac tivation of Orano/Denison’s >3 mlb/yr McClean (Canada); Paladin’s 5 mlb/yr Langer Heinrich (Namibia); Lotus Resources’ 3 mlb/yr Kayelekera (formerly Paladin; Malawi); possible expansion/nor malisation of Kazatomprom’s local ISL operations (>30 mlb/yr; assuming it can boost acid supply) and at Orano’s Niger opera tions (5 mlb/yr). Key projects worldwide include Deep Yellow’s Tumas (Namibia) and NextGen’s Rook I (Canada). Elsewhere, exploration pro grammes are now being deployed in Namibia, Tanzania, Western Australia, Uzbekistan and Tajikistan. A price rally, explained Again, what sparked this price rally in uranium in 2021? We see three partly related events, emerging in succession, contributing to the signal’s sustained 2-3 year lift: 1. 2021’s post-lockdown rally: as with many commodity markets, uranium’s price reported a sustained lift from mid-2021 on post lockdown’s synchronised recovery in demand & stocking; 2. 2022’s war inflation: further price lifts occurred in 1H22, a response to war-related hits to global energy (Russia cutting EU gas supply, a primary catalyst), and a rising risk of Russia termi nating uranium exports; 3. 2023’s ‘new demand’: nuclear power demand reported a step-change lift in capacity growth/investment worldwide; two motivations: need to decarbonise power systems; war-prompted demand for power sector independence (incl. Europe, Japan). Physically-backed funds A contributing factor to uranium’s price outperformance was the buying strategies of two physically-backed uranium funds – Yellow Cake and Sprott Physical Uranium Trust. Their collective buying programme has been large: 2021-23,

acquired & stored >50 mlbs of natural uranium, >25% global annual demand. The timing of their engagement of the market – Sprott buying from spot market vs. Yellow Cake, from Kazatomprom’s inventories – just as the global oxide trade was tightening – enhanced the scale and duration of spot’s rally. Miners’ strategic responses Most commodity markets feature a ‘perfect competition’ structure: many producers versus many consumers, none of whom are ‘price makers’. Some markets, however, are ‘oligopolistic’: a few dominant producers versus many consumers. Examples include iron ore, top grade metallurgical coal, potash and crude oil. Given the supply-side dominance of uranium’s two largest min ers – Cameco and Kazatomprom – we believe that this market also has traits of an oligopoly. That is, at various points in uranium’s price cycle, these two majors possess some pricing power – exercised via changes in their joint production rate. Curiously, even after uranium’s price surge, output rates at Cameco and Kazatomprom have not lifted significantly. True, it takes time to reactivate assets. But players of a perfectly competi tive market would have clearly boosted production within the 12-24 months of this rally. The incentive certainly exists for these majors to delay reactiva tions, to allow the rally to extend. Their returns lift with the rally, on their unchanged production rates. So, what prompts the majors to finally lift output? Market-wide asset reactivations and project deployments would be a sufficient catalyst. But the majors can pre-empt most of them, with their own large-scale reactivations. As their joint output lifts, uranium’s price falls. Tracking supply side responses, the majors can then assess what lower price-level deters most market entrants over the long-term. 2024 price outlook We are uranium price bears, calling for a further 10% pullback in spot, towards US$80/lb this year. Yes, we are bulls on uranium demand, underpinned by a worldwide re-acceptance of nuclear power as a carbon-free base load option. But we’re even more bull ish on supply: reactivations are underway; the project pipeline is expanding. Compounding this industry response to uranium’s price rally is the fact that Cameco and Kazatomprom will eventually and strategically claim back their market share. And they can do this at a lower price than their competition, using their abundance of low cost, spare mining capability. 

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JUNIOR MINING

Junior mining funding focus

South Africa’s junior mining sector, which generated R88 million in annual revenue in 2021, is set to get a shot in the arm from the Junior Mining Exploration Fund (JMEF), a fund estab lished by the Industrial Development Corporation (IDC) in partnership with the Department of Mineral Resources and Energy (DMRE). The first call for the fund, which is allocating R400 million to companies to progress mineral exploration, is set to open in May 2024. By Nelendhre Moodley .

A ccording to Minerals Council South Africa CEO, Mzila Mthenjane, the country’s mining exploration spend in 2023 was 0.8 percent of global spend, down from over five percent two decades ago, which is all the more reason to invigorate the waning sector. In February this year, the DMRE and the IDC signed a Memorandum of Agreement (MOA) offi cially establishing the Junior Mining Exploration Fund (JMEF). Establishing the fund forms part of South Africa’s mineral exploration strategy, which is aimed at enabling eligible South African junior mining enter prises to access funding to conduct prospecting work; increase access to mine ore bodies; and promote economic inclusion to support equitable economic growth. The fund will be administered and managed by the IDC while the DMRE, supported by the Council for Geoscience, will determine the minerals whose exploration can be funded through this initiative. According to Minerals Council South Africa’s Junior and Emerging Miners Desk lead, Grant Mitchell, the strictly regulated fund allows applicants

Minerals Council South Africa’s Junior and Emerging Miners Desk lead, Grant Mitchell.

to apply online for between R20 million and R45 mil lion – a boon to junior miners who face severe funding challenges. Importantly, and in line with ensuring transparency, a private-sector expert will be nominated to the board. Discussing the criteria associated with the fund, Mitchell explains that the applicant must pos sess a valid ‘Prospecting Right,’ as defined by the Mineral and Petroleum Resources Development Act (MPRDA) of 2002 and the right must have an expira tion date that is at least 12 months from the closing date of the application. “The entity must be engaged in greenfield or brownfield exploration activities within South Africa and must have a combined direct and/or indirect ownership by black people (as defined in the Broad Based Black Economic Empowerment Act 53 of 2003) of at least 51%. Further to this, the entity or any controlling shareholder should not have revenue generated from other mining rights.” Mitchell adds that exploration companies will be able to use the seed funding provided by the JMEF to leverage further capital. “For instance, if a greenfield explorer with the

The country’s mining exploration spend in 2023 was 0.8 percent of global spend, down from over five percent two decades ago.

requisite prospecting right receives funding from the JMEF, the entity will also be able to court other financiers as it takes its project up the value curve. As it is, R20 million to R40 million is not sufficient to fully advance a greenfield exploration project – the company will need significantly more in funding to develop the deposit. Essentially, the intention is to afford majority black owned entities a platform to attract additional investment to progress devel opment of a deposit.” Since there are currently few major ity black-owned exploration companies, the fund aims to provide the impetus to grow this segment of business. Encouraging junior companies to expand exploration activities. In 2022, government published South Africa’s Exploration Implementation Plan to attract mineral exploration

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investment, reignite mineral development, accel erate new mineral discoveries, clean technology, processing and mining supply and services sectors. Mitchell says the junior mining sector, which plays an integral role in the mining industry, has been growing. In 2018 it generated R 55 billion in annual revenue, and this rose to R88 billion in 2021. It must be noted however that this revenue is primarily from small to mid-tier producers, and does not include explorer/developers who do not generate revenue. However, the money prospecting and mine-develop ment companies spend does reflect in the broader economy and as a source of jobs. Green field explor ers, even if they are not successful in finding a viable deposit, still make an immediate contribution to the economy. Highlighting what the junior mining sector requires to succeed, Mitchell explains that there is an urgent need to ensure an investment-friendly regula tory environment. “The Minerals Council South Africa is currently engaged in research to determine which aspects of the regulatory environment need to be revamped to entice more junior mining and exploration compa nies to enter the sector. As it is, administrative delays are often a hinderance to attracting investment and there is currently a trend of mining and prospecting right applicants competing for minerals in the same deposit. We are finding that a secondary prospecting or mining licence holder is challenging the primary applicant for the same deposit. What sometimes occurs is that a second company applies to mine the already allocated deposit for a secondary mineral. As such, government needs to provide clarity on the matter so we eliminate ambiguity and confusion.” Mitchell points to International Best Practice for mining and prospecting rights - the First Qualifying Applicant process, which ensures that a single applicant has access to the deposit at a given

Above: South Africa’s junior mining sector is set to get a shot in the arm from the Junior Mining Exploration Fund. Left: South Africa should look to adopt the First Qualifying Applicant process for direction on minerals exploration.

time. “South Africa should look to adopt the First Qualifying Applicant process for direction on miner als exploration.” Moreover, the various government departments required to process a mining or prospecting right need to align seamlessly to ensure that mining appli cations are approved timeously. “When an applicant applies for a prospecting or mining right the DMRE and Department of Water and Sanitation and the Department of Forestry, Fisheries and the Environment interact to grant the mining right. Offering an efficient one-stop shop for mineral rights processing without the usual delays will go a long way in growing the exploration arm of mining.” Importantly, as prospecting is highly risky and often takes years, extended licencing timeframes

Objectives of the JMEF The Fund was established to meet the following objectives:  to assist qualifying enterprises in the mining industry to conduct prospect ing work;  to increase Black Junior Miners’ access and licence to mine ore bodies;  to promote economic inclusion to support equitable economic growth.

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JUNIOR MINING

government for an off-the-shelf cadastral system, the DMRE has finally announced the preferred bidder for the mining resource management system - the PMG Consortium. The consortium is a conglomeration of three companies, namely Pacific GeoTech Systems, MITS Institute and Gemini GIS and Environmental Services. Canadian-based Pacific GeoTech Systems has more than two decades of experience delivering online resource management systems. “While Pacific GeoTech Systems offers significant experience implementing the cadastral system in Canada and particularly in British Columbia, it does not have experience implementing the system in Africa or South Africa, for that matter. As such, the existing methodology and model will need to be adapted to South African mining needs. I expect local partners will play an integral role in guiding the Canadian expert in the implementation process.” According to Mitchell, when implementing the system, Pacific GeoTech Systems will need to consider South Africa’s extensive and diverse miner ology and the country’s long history of mining. “Implementing a cadastral system in South Africa is different from implementing one in Botswana or Namibia, for instance, as those countries are primar ily diamond producing destinations – although they

must be considered, including consent for a five-year time frame for a prospecting right wherein the appli cant provides a project update every two years, with the DMRE monitoring activities at the site regularly. According to Mitchell, it is far more expedient to extend the time-frames on an existing mining or prospecting right than requiring the applicant to reapply for the licence every two years. Cadastral system Following years of the mining industry bemoaning the disastrous SAMRAD system and pleading with

A functional mining cadastral system is an online portal that displays a country’s mineral wealth in a way that is accessible to the public.

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mine other minerals as well. South Africa is a more challenging task given the scale and diversity of our industry.” As it stands, data relevant to mining and prospect ing rights are scattered, with some information still in paper files while other related sets of information have already been captured. The task of collating the information onto a single digital platform is set to be a time-consuming exercise. “The challenge for the consortium lies in the accurate capturing of all the data. As such, I believe the time-frame to getting the cadastral system oper ational is a little too optimistic.” The PMG Consortium reported that it would have the cadastral system operational in a year’s time with a further two years required for system maintenance. “The good news is that the company chosen to implement the cadastral system is reputable, which is a huge step forward for the South African mining sector. The fact that the cadastral system will be transparent means there is a low chance of more than one company applying for a mining or pros pecting right on the same deposit. Importantly, the online system will allow the various government departments to seamlessly evaluate the permits and eliminate the extensive mining licence backlogs that currently exist,” concludes Mitchell. 

As prospecting is highly risky and often takes years, extended licencing timeframes must be considered.

Cadastral system  A functional mining cadastral system is an online portal that displays a country’s mineral wealth in a way that is accessible to the public.  It can serve the dual function of showing the state of play of mining activi ties while allowing companies to apply for various kinds of exploration or mining rights.  The successful implementation of the cadastral system will be a game changer for the mining industry, which for years has had to contend with the disastrous SAMRAD system.

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What do investors and corporate financiers consider when evaluating Greenfields projects? Modern Mining spoke to Peter Major, director at Modern Corporate Solu tions, for insight into early-stage projects the investor is mulling over. Eyeing up early-stage projects

“ A s a corporate financier, we weigh different commodities, the quality of the asset, location and market appetite for each resource. In particular, we favour commodities that we have intimate knowledge of, such as base-metals, gold and silver. However, given the logistical challenges associated with bulk metals (coal, iron ore, manganese, chrome), projects in this category have been placed on the back-burner for the moment. We are also staying away from new-age energy metals: lithium, graphite and rare earths because they are too new and too difficult to refine and market. For us at this time anyway,” says Major. Importantly, Modern Corporate Solutions is keen to consider projects that are set to deliver near term benefits – in other words, projects that have the potential for development sooner rather than later and that can be taken up the value curve in less than two years. Stand-out projects on the radar include base metal projects in the Northern Cape, a gold project in the Piet Retief area of South Africa, two gold properties in Zambia and the Kabwe lead zinc proj ect also in Zambia. “The Kabwe lead zinc project was the world’s richest zinc deposit for 90 years, (1904 - 1994) before it closed in 1994. Together with Modern Corporate Solutions, junior miner, Leopard Exploration and Mining, which owns the project, believes there are more ore bodies in Kabwe that have yet to be been found. We are in the process

of raising funds from the London market and will soon be making an announcement related to project exploration.” The company has

rich data sets of existing orebodies, but given that markets require greater cer tainty for new orebodies, Leopard Exploration and Mining is busy with an exploration programme aimed at discovering anomalies that will point to more new large-scale orebodies.

Attractive commodities at the moment include copper and gold.

“Leopard Exploration and Mining is preparing to undertake extensive geophysical surveys and resource definition using drone surveys, followed by confirmatory drilling programmes to allow it to increase the mineral resource and thereby attract investment in the project,” says Major. Modern Corporate Solutions is also upbeat about gold mining in Zambia, a renowned copper belt destination, believing that arti sanal miners are key indicators illustrating the significant potential for gold mining in the country. The financier also has its eye firmly set on two Greenfields projects in the Northern Cape, with moderate, but high-tech exploration - Northern Cape Base Metals (NCBM) and Northern Cape Lithium Tungsten (NCLT). “Using the available data-set, our experienced geophysicist has picked up some really large anom alies and he is convinced these are Black Mountain type anomalies - only bigger,” enthuses Major, who explains that the investor is also seriously consider ing a tin project north of Pretoria. project in South Africa, given the red-tape and myriad challenges miners in South Africa face. The country continues to receive a bad rap for the leg islation, energy, logistics, administration, rule-of-law, and lack of cadastral system in place, which has seen many projects stalled and miners frustrated by what seem insurmountable challenges. Highlighting what he considers to be attractive commodities at the moment, Major explains that two commodities stand out – namely, copper and gold. This is underpinned by ease of identifying, explor ing, mining and refining as well as robust demand for gold and copper. “These are easy commodities to find – in fact, it is easy even for artisanal miners to identify, mine, According to Major, financiers and investors would rather fund projects outside of South Africa, preferring to invest in a satisfactory project in Africa than a great

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refine and sell gold and copper. These commodities tick all the right boxes, unlike bulk commodities, such as iron ore, chrome and manganese, which face massive logistical challenges.” Commodities performance While gold has been a star performer, trading at well above $2000/oz, battery metals have lost much of their shine, with lithium proving to be volatile and experiencing a massive price drop from its high of $80 000/t to $12 000/t over the past 12 months. “PGMs, nickel and cobalt have also slid over 60% from their highs. Why are the prices of these minerals, used in battery metals and electric vehi cles and touted by the pundits to skyrocket, falling? Is it because these commodities ran too far ahead too fast? Is there more in the supply pool than initially thought,” he questions. According to Major, whereas demand is immedi ate, supply can take months or years to catch up and by the time supply does catch up, “demand isn’t as great once new supply reaches the market and this subsequently leads to a decline in the price of that particular commodity. “Even though key commodities, such as nickel and cobalt, underpin the drive for clean energy, the prices of these commodities have not held up nearly as well as anticipated.” Major says that an increasing number of miners are selling the by-products from their primary mining sources, which is having an adverse impact on some operations. “Indonesia is now recovering nickel from its iron nickel deposits, which has put primary nickel produc ers out of work. This is the same scenario faced by miners of pure silver mines in Idaho, as miners in Mexico and Peru, who mine base-metals that pro duce silver as a by-product, are now selling silver into the market. This has devastated the pure silver mines of Idaho, which now lie idle.” Attracting mining FDI Africa is rich in resources, resources the world needs, but does the continent offer foreign inves tors ease of investment? “Investors are like kids with money – they are looking for easy opportunities to grow their wealth and mining majors, and juniors alike, are happy to explore for minerals in Africa. But many countries on the continent, particularly South Africa, make doing in-country business really challenging.” According to Major, countries in Africa need to take a leaf out of the Canadian and Australian way of doing business. “Both these countries encourage mining compa nies to explore, mine and beneficiate. In fact, Canada arguably has the best exploration databases in the world. This is how Canada adds to its coffers and

Bulk metals (coal, iron ore, manganese, chrome) face logistical challenges.

miners are happy to do business in Canada because of the ease with which one can do business there.” South Africa and Zimbabwe, on the other hand, which were once the darlings of foreign investors because of their wealth in key commodities such as gold, silver, diamonds, platinum and manganese, have such investor unfriendly poli cies and challenging operating environments that they now deter investors. The dire rate of new mines and valuable prospecting operations these past 20 years attests to that fact. 

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Given the sheer size of Bengwenyama, the project will employ roughly 4000 people. Southern Palladium lines up Bengwenyama for construction in 2026

Platinum group metals developer, Southern Palladium, which is lining up its Bengwenyama project on the Eastern limb of the Bushveld for construction in two years’ time, says that presenting its project to investors at the Mining Indaba’s 1-2-1 event, lifted the profile of the project tremendously. By Nelendhre Moodley . meeting.

“ E ven though platinum is probably not the hottest commodity on the market at the moment, the Bengwenyama project garnered significant interest at the 1-2-1 conference. The project is now firmly placed on the radar of numerous potential financiers who attended the 1-2-1 event and the Mining Indaba in February,” MD Johan Odendaal tells Modern Mining . The 1-2-1 Mining Investment global event series connects portfolio managers and analysts from insti tutional funds and private equity groups with mining company management teams for 1-2-1, private in person and online meetings. On 5-6 February 2024, 101 mining companies and over 650 investors joined the 1-2-1 Mining Investment Cape Town. The event is built around two-days of 1-2-1 meetings matching projects to investment capital. Further to this, Mining Indaba - the world’s largest gathering of influential stakeholders in the min ing industry, provided a perfect venue for Southern Palladium Board members to gather for a strategic

“There is so much happening with the project, the company, and the global economy that we took the opportunity to have an intense strategic plan ning session. Importantly, global economic activity has warranted the need for better planning regard ing how we take the Bengwenyama project forward.” Taking Bengwenyama up the value curve Highlighting recent project milestones, Odendaal explains that the A$19 million dollars raised at its list ing on the Australian Stock Exchange in June 2022 assisted the company to kick-start its exploration programme with the aim of reaching Pre-feasibility Study stage by the end of 2024. It subsequently declared a resource which gave it the confidence to apply for a mining right. During 2022 and 2023, Southern Palladium undertook a widespread drilling programme to better understand the Bengwenyama resource. It followed with a closely spaced drilling programme

Southern Palladium’s MD, Johan Odendaal.

Southern Palladium appointed industry heavy-weight Roger Baxter as its new Chairman.

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intended deadline. By mid-October, we received a letter of acceptance for the mining rights application from the DMRE. The big milestone for us was receiv ing the acceptance letter as it marked the start of the next phase of project development – finishing a scoping report for the environmental impact assess ment and expert studies. Earlier this year, we received the results from the technical Scoping Study, which delivered beyond our expectations.” According to Odendaal, the Scoping Study indicated that the project was substantial, plac ing Southern Palladium in the ranks of a Tier One operation. “The recently concluded Scoping Study rep resents a pivotal moment for our company, made possible by the A$19 million raised in June 2022 for the drilling programme and associated study work. The Bengwenyama project is now recognised to be of world class stature. Our commitment to explor ing every avenue to maximise value and optionality for all stakeholders has been underscored by the study’s impressive outcomes: a NPV8 of US$700 million, an Internal Rate of Return (IRR) of 21%, and a noteworthy annual Free Cash Flow (Pre-tax, real terms) of some US$180 million at steady state over a 36-year mine life. These compelling figures make a strong case for the continued development of the orebody. Our exploration efforts have resulted in the identification of a significant resource totalling 26.22

The A$19 million dollars raised at its listing on the Australian Stock Exchange in June 2022 assisted the company to kick-start its exploration programme.

towards the end of 2023 and zoned in on the area above 500 metres on the eastern side of the project. “On the 29 th of September 2023, we applied for a mining right which was six months earlier than our

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study is an all-in-sustaining-cost of $970 per ounce, which places the Bengwenyama project at the lower end of the cost curve. This gives us some comfort and means that if prices start to drop, we will be fairly safe. The main reason for the lower cost per ounce is the higher grades of the UG2 reef, which can be efficiently delivered to the plant due to ideal UG2 reef mining conditions.” Strategically situated amongst major mining oper ations with all the necessary infrastructure (water, power, roads, services, and skilled labour force) already in place, the Bengwenyama project will see the emerging miner focus on mining the higher grade UG 2 Reef close to surface. “Bengwenyama is a shallow ore body and pro vides us with an opportunity for early access. This gives us a significant advantage over our peers in terms of capital expenditure and the speed at which we will be able to bring the project into production. We will access the first ore at roughly 90 metres.” In the initial study, Southern Palladium considered a single decline with a relatively slow build up to steady state production but has subsequently taken the decision to include a second decline. The sec ond decline opens into the Horst Block, located on the north-western part of the Bengwenyama project mining area. Given the sheer size of Bengwenyama, the proj ect will employ roughly 4000 people. “Considering the multiplier effect of roughly three to four times the number of people employed, between 12 000 and 20 000 people from the imme diate area are set to benefit from Bengwenyama.” Financial considerations Following weak demand for PGMs, producers are feeling the pressure with many miners considering business restructure – this in a bid to keep afloat. Odendaal, meanwhile, says that Southern Palladium is in a comfortable cash position, with cash reserves in the bank of close to A$9 million that will take the project to completion of the Pre-feasibility Study stage. The Australian listed entity is, however, planning for two potential scenarios to play out in the PGM industry. “In the worst-case scenario – should the bottom fall-out for PGMs, Southern Palladium has a financial buffer that allows the company to complete its PFS and continue with business for another 18 months. In essence, we would still be able to sustain the office and complete our studies.” Given the diminished demand for PGMs, the company will be keeping a close eye on the mar ket, seeking out quarterly market assessments as it begins preparation for project construction. “Hand-in-hand with preparing for project con struction, we will be finalising our Definitive Feasibility Study and embarking on a final investment decision.

million ounces (7E). Notably, the Scoping Study has focused on the UG2 reef only, comprising 15.72 mil lion ounces, with 6.52 million ounces classified as Indicated Resource. Importantly, this study acknowl edges the substantial remaining resource in the Merensky reef (MR) and UG2 and MR Exploration target areas, which were not included in the current assessment of the 36-year mine life. The Scoping Study underscores that we possess a potential world-class Platinum Group Metal mine, fortified by a substantial resource within an estab lished mining area, effectively mitigating associated risks. Recent geotechnical studies and metallurgi cal assays confirm the suitability of well-established mining methods and processing techniques for the orebody located in the Steelpoort area. This location offers various advantages, including energy acces sibility from the national grid, potential for alternative green energy sources, well-developed transpor tation infrastructure, and a skilled workforce from established mining communities.” The life of mine on the UG2 reef only is estimated at 36 years with a total of approximately 52 million tonnes mined (~10.9 moz 7E, which includes plati num, palladium, rhodium, ruthenium, iridium, osmium and gold) for an average annual production rate of 330 Koz PGM (6E basis which refers to platinum, palladium, rhodium, ruthenium, iridium and gold) with cash costs firmly at the low end of the global cost curve. Mining and processing are amenable to proven technology. The scoping study pegged capex for mine devel opment at $408 million, for a life of mine of 36 years and an operation scheduled to deliver 2 million tonnes per annum, producing in order of 330 000 ounces of PGMS at steady state production. “The project has a payback of four and a half years from a start of planned production. Another important aspect that emerged from the scoping

The three key PGM products of platinum, palladium and rhodium are forecast to be in a potential deficit in 2024 and 2025.

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